The practice of online auctions has grown at a dramatic pace. Auction sites have been developed for a wide range of products. This has resulted in an active, dynamic pricing environment for many products. The standard auction practice may result in the maximization of the seller's revenue in some instances. Additional information on electronic auction and bidding systems can be found in such U.S. Pat. Nos. 6,041,308, 6,021,398, 6,012,046, 6,012,045, 5,924,082, 5,835,896, 5,845,266 and 5,689,652, which are hereby incorporated by reference herein. Commercial examples of auctions systems are also accessible online on the Internet, at websites managed by such companies as E-Bay, Yahoo, and other similar sites.
However, the standard auction practice is limited in some respects. A user may not be able to utilize two mutually exclusive items. For example, one person cannot physically use two golf tee times at the same time, on the same date at two different golf courses. Or, a user may not want to take possession of more than one out of a collection of items. For example, a user may only wish to accept one golf tee time on either Saturday or Sunday, but not a time on both Saturday and Sunday. Therefore, users can bid on only one mutually exclusive item at a time. If they are the high bidder on more than one item, they may dispose of the other item through resale or allowing it to expire in the case of time-based items. At the same time, a user bidding on only one mutually exclusive item decreases the probability they will be successful. If they bid on more than one item, they increase the probability they will be successful bidding on any one of the items. However, they risk being the winning bidder on more than one item.
From the seller's perspective, if bidders only place bids on one mutually exclusive item at a time, the number of bids on any one item will be less than if they placed bids on multiple items simultaneously which lowers the expected winning bid. Also, if bidders limit themselves to a single bid, the probability no one will place a bid on any individual item increases, thus lowering the probability the seller will successfully sell their item.
Furthermore, the standard auction method does not allow the simultaneous maximization of two constraints. For example, a bidder may have a range of preferences and maximum prices they are willing to pay for a set of items. However, standard auction practices do not allow the simultaneous maximization of both user preference and bid prices. They only maximize based upon bid price. While U.S. Pat. No. 5,924,082 referenced above includes an option for providing ranking information, this option does not allow a bidder to prioritize bids in such system. Moreover, the system described therein does not actually consummate a bid for an item, but rather merely identifies potential acceptable transactions between two parties.
Finally, while there is some prior art capability to perform bidding on multiple items of the same kind (in so-called Dutch auctions), the bidding process there is not optimized from the perspective of the seller, since the lowest winning bid price for the item is awarded to all the other winning bids, even if such latter bids are much higher. In other words, if 100 persons bid on 5 identical widgets, the five winning bidders all pay the same price, equal to the 5th highest bid, and this result can distort the bidding process.